The price of Cardano has risen by 8.6% in the last 24 hours as enthusiasm grows around Midnight, its new privacy-focused sidechain. In the moon cycle, the midnight phase usually signifies a reset — a moment before a new beginning. But for ADA, this reset may indicate the start of a new decline.
The price is still in a downward pattern, momentum is weak, and several internal signals of the chain indicate a possible continuation of the downward trend that has dominated for months. Could this be the beginning of a 39% decline in the price of ADA?
The bear flag structure and hidden bearish divergence still favor the downtrend.
Cardano continues to trade within the bear flag on the daily chart. A bear flag forms when a steep drop is followed by a smaller, upward-sloping channel. This channel often acts as a pause before the same downward trend continues.
Between November 10 and December 9, the price of ADA peaked while the RSI rose higher. RSI, or relative strength index, is a momentum indicator that shows whether buying or selling pressure is stronger. When the RSI rises but the price does not follow, it often indicates that the rally is weak and sellers are dominating the trend.
Since ADA has already dropped about 54% over the past year, this hidden bearish divergence supports the idea that the downtrend is not over.
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The bear flag's apex predicts a potential 39% drop if the lower trendline breaks. That move would put ADA close to $0.25, a deeper bearish target.
This creates the basis for the entire story: Midnight may mark a new phase for the network, but the chart treats this bounce as part of a broader downtrend.
Whales leave when used coins jump — do traders sell to the bounce?
Chain internal signals correspond to the down chart.
The largest Cardano whales, whose wallets contain over a billion ADA, have sharply reduced their exposure since December 8. Their combined balance fell from about 1.86 billion ADA to nearly zero in just a few days. Whales do not empty their positions like this unless they are waiting for better entry points lower or want to use strength to exit.
Another internal chain metric confirms this behavior. Spent Coins Age Band tracks how many ADA tokens move daily between both young and old wallets. On December 6, about 95.26 million ADA moved on-chain. By December 10, the number had risen to 130.46 million ADA, which was about a 37% increase in four days.
This jump indicates that even more holders, including older ones, may be sending coins to the market. When whale sell-offs collapse and used coins rise simultaneously, it typically means traders are using the bounce to sell, not accumulate.
The first section showed that the structure is bearish. This section shows that the behavior is also bearish. Now the price levels simply convert this combined pressure into specific areas that traders need to monitor.
Cardano's price levels indicate a broader downward trend.
When both the chart and chain signals tilt negative, the subsequent moves depend on a few clear levels.
If the ADA price falls below $0.42, the lower trendline of the bear flag will break. From there, the price could drop towards $0.37. If $0.37 does not hold, the full flag forecast towards $0.25 becomes likely, indicating a 39% downward trend suggested by the pattern.
The route for bulls is narrower but still possible. Cardano must first redeem $0.55. Closing daily above this level would break the upper limit of the bear flag and weaken the bearish setup. Holding above $0.60 would indicate that this midnight phase shifts from a reset to a more constructive recovery.
Currently, only a small 7–8% drop is needed to trigger declines, while nearly a 20% rise is needed to nullify it. As whales exit and used coins rise, the weight of evidence continues to tilt downward.
